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Monday, May 2, 2016

Why Store Problems Are All My Fault

That dirty restroom floor?  My fault.  That time an employee was distracted rather than greeting you as you entered?  My fault.  That perpetual stock outage on DeathModels Hemorrhage Red paint?  Entirely my fault.  The cash offer you didn't like for your mint foil ManaTwister?  Also my fault.

Why are these things entirely my fault?  Stay with me here.  It will all make sense.

Everyone knows by now that comic and hobby game store owners are idle rich.  We stop by once in a while to pick up the checks and play a few games.  Why else would so many people want to open game stores?
The reality of the matter is far more mundane, of course.  Running a small specialty retail store, which is what most comic and hobby game stores are, requires a competency set and process framework that is similar at its core to any other small specialty retail store.  Scrapbooking supplies, swimming pool equipment, women's shoes, cell phone screen repair, it's all of the same genus, even if there is some difference in species.  And very few of us are sitting in yachts in Miami Bay with wads of cash strewn about and ropes of Moissanite around our necks.

The core competency set is sufficiently well-mastered in retail that it spans an entire sub-industry of seminars, how-to literature, web videos, and even business blogs like this one.  How meta.  In general, the owner of a small business has to build process.  Through building process, it becomes possible to hire humans.  With humans on payroll, it becomes possible to procure goods, intake and process those orders, merchandise them to present them for sale, field public visits, exchange goods for money, and at the end of the day, close the doors and clean up the facility.  With those humans, the business can market itself to the audience, convert that audience into a clientele, and invest that clientele with sufficient happiness that it chooses to return.  Still additional humans perform accounting, compliance, staffing, physical maintenance, technological maintenance, and foundational tasks such as securing and renewing a lease and raising capital.

In no small number of comic and hobby game stores, everything in the foregoing paragraph is performed by one human: the owner.  There are only so many hours in the day, so an owner eventually has to hire more humans in order to do additional work.  Since these humans usually don't bring a bunch of capital to risk on the business enterprise, they generally have to be paid for the work they do every time.  And given the limitations of space and time and the unfortunate lack of actual psychic powers and mind-reading, this means the owner will need to convey an understanding to the employee of what needs doin' and how needs doin' it.  This is "process."

When I owned Wizard's Tower Gaming Center in 1998, and then was a partner in Arizona Gamer from 1999-2001, it was during a younger era in my life when I externalized a lot of blame for my misfortunes.  I wasn't making sales because those darned customers just wouldn't come in.  I couldn't keep any staff because they were lazy and undependable.  My store never really advanced because I just didn't bring enough money to the table to start.  (Okay, that last part was true anyway.)  The actual failure, though, was one of process.  Every single thing that was wrong with my businesses was ultimately my fault.  I was the owner.  I had the power to decide what was policy and implement it.  If I lacked the resources, it was upon me to gather more resources.  And so on.

Any lacking or failing of the store, no matter how trivial, can then be chalked up to process failure on some level, and process starts with the owner (or in my case, the managing partner, the partner vested with authority by the other partners to administer the business).

Let's examine:

PROBLEM: The restroom floor is dirty.
REASON: Cleaning procedures are about as literal as process gets.  They are typically checklist tasks that are assigned to staff as part of opening or closing a store.  If a restroom floor becomes dirty midday due to a spill or something, it becomes direct supervision by the manager on duty, whose authority it is to direct process.  Right now we're having a problem where the linoleum restroom floor is getting dirty too much and too quickly despite being cleaned.  Some combination of the following must therefore be true: We are using inadequate cleaning equipment or detergent; we are cleaning it too infrequently; we are failing to execute the cleaning task itself; the linoleum is worn and needs replacing; other factors.  It is up to me to coordinate with management to troubleshoot this process.  We've mostly eliminated execution and frequency as causal factors.  We're experimenting with different detergents to see whether we can get a winner.  The fact that other floors in the facility do not have this problem suggests it may be the linoleum.  However, with a short remaining lease, replacing the linoleum is not a cost-effective solution.  In that case, if we reach no other solution, the situation will remain directly as a consequence of my deciding not to allocate resources to reflooring the restroom.  Pretty clearly my fault, then.

PROBLEM: The employee didn't greet you when you came in.
REASON: This ultimately comes down to what Michael Crichton called "Flight deck procedures requiring added scrutiny."  There are people who would say this is just an employee performing badly.  However, that's far too shallow of an analysis.  Most employees will do well if given the opportunity, the confidence of management, good training, and a clear set of expectations.  That's all process, so that's all on me to coordinate with management to ensure that we have.  But what if despite all that and an employee being genuinely excellent?  Well, if we're chronically understaffed because business growth has outpaced staffing, as is happening right now as I type this, then that's my fault for not hiring enough humans.  Or my fault for not coordinating with management to ensure that scheduling put enough humans into place during busy times and days.  And it's my fault if I didn't use our data-gathering resources to find out when those times and days were.  And so on.  What if it's just a freak occurrence, a spike rush in business never anticipated?  You don't want to make policy based on black swan scenarios.  But this comes down to management and process too.  The staff training and guidance has to be that situational awareness where we acknowledge and welcome the arrival, cycle back to the line at the register, and then check in with the customer as soon as feasible.  We'll never be perfect, but if I do my job properly, the failure instances will be minimized.  And what if the employee just has a bad day?  It's up to management to decide whether to reassign or redirect.  Which again comes down to process.

PROBLEM: Out of stock on whatever (chronically, not just spot outages).
REASON: It's easier to hang this on my neck because it's known that I handle (effectively) all the procurement for DSG.  But there is deeper process than this.  Inadequate inventory diligence can lead to something being gone from the shelf (theft, a miscount, whatever) but not triggering a re-order in the point-of-sale system.  Inadequate customer rapport can lead to getting a distorted or absent picture of what kind of upcoming releases have "buzz."  (Customer requests alone are not sufficient criteria for order forecasting, but more information is better than less information, even if its reliability is variable.)  If I've run the store unprofitably, I won't be able to attend the GAMA Trade Show, distributor open houses, or other events at which I can see and try new upcoming releases firsthand.  If I have developed insufficient technical infrastructure... well, it goes on from there.  Easily my fault.  Even if it's an outage caused by production breaks with the manufacturer, the process failure is that we've neglected to ascertain that and communicate it effectively to the customer.

PROBLEM: Offers on buy ratio are upsetting customers.
REASON: One of two fundamental things could have occurred here.  Either our offer was fine but the customer had a different expectation, or our offer was not fine and the customer is right to be upset.  In both cases, it falls to process, which means it starts with me.  Managing customer expectations requires rapport, communication, and finesse.  This is part of staff training, part of good hiring of socially well-adjusted people, good product knowledge, good sales chops, it goes on.  As above, all this means I need to coordinate with my management team to put good staff training and development into effect, and let our staff's natural talent and personality shine through.  A customer who trusts and likes the staff member reviewing his cards or games for purchase will be less upset because he knows the employee isn't trying to swindle him; it's just value ratio, and the market price is what it is (and is not set by us, but by... the market).  Value ratio, meanwhile, is the other thing that could be wrong.  And recently it has been wrong, and I have lost buys because of it.  We turn through a lot more low-value cards day by day than high-value.  This should not be a surprise.  Toyota sells more cars than Ferrari does.  Our buy and sell ratios were set with that in mind, and were a one-size-fits-all percentage for cash and another for store credit, the end, with simplicity being a sub-goal.  However, we found that on higher-end cards, it really was kind of an unfair ratio.  We still got some trade-ins, mostly just for credit, but a lot of sellers passed on our offer, and a few got upset about it, thinking we were trying to exploit them.  I revised the process this week in anticipation of video game buys, and we now have ratio upgrades once a card's market value gets higher than a given point.  To prepare for an unknown quantity of buys at this ratio, we made sure we had a lot more money in the bank ready to allocate to this.  The entire process here involved direct work from me plus coordination with management to make sure everyone on staff knew the score.  So far, signs are good that we made the correct call on this, despite making the ratios less simple.

Those are a few examples of different problems with different causes, different expressions, different customer effects, and different needed solutions, where the common thread was that I, as the person in charge of it all, need to develop and implement better processes to solve the problem.  And that is what I mean when I say that store problems are all my fault.  There is a positive side to this universal responsibility, and that is that a store with great processes has a lot of value.  The more the store can function adequately during extended absences by ownership, generally the result of strong processes being overseen by talented managers, the more that business is worth, and generally the more profitable it ends up being.

*Artwork (C) 2016 Mike Krahulik / Jerry Holkins

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